I think you'd be surprised at how quickly he will be able to ride without touching the ground. Several kids in the hillclimbing circuit ride all around and they barely reach the pegs. Its like when a youngster rides the older brother's Ten-speed. They just scoot over and stretch to get a toe down. They still bail alot and bust the clutch lever and perches (bark busters will save you money), but they get it figured out easy. They usually need someone to hold em up till they get started, or we use wood blocks for them to stand on. Its somehow easier for them to adapt. Probably because they are not scared or not relearning something, its all new.
Teaching the clutch will probably be more of an issue, and the almighty 65's powerband. They will wheelie with me on it. I would look into detuning it for a little while. Restricting the exhaust, extra slack in the throttle, somethin' till the little guy gets it half way figured out. The first incident or two will be important to his confidence.